One in four entrepreneurs seeking finance plan to use credit cards this year as access to traditional funding remains hard, new research suggests.
More than three quarters of small businesses and entrepreneurs surveyed by the Entrepreneurs’ Organization and Investec Bank said they were looking to secure funds in 2010, but 59% expect this to be difficult to do.
The research suggested entrepreneurs were being pushed towards alternative finance sources such as invoice discounting and asset based lending (35%), credit cards (24%) or loans from friends and family (11%).
Also highlighted in the survey was the high percentage of entrepreneurs who view the current economic climate as an opportunity rather than a threat (72%).
However, half of respondents said client demand was the biggest current challenge while nearly a quarter cited the cost and availability of labour.
“The ‘entrepreneurial class’ – in terms of generating revenue and jobs - will be key to the UK economy recovering and more needs to be done to help them,” said Ed Cottrell of Investec.
“When considering providing funds to entrepreneurs, there needs to be a strong focus on risk management but also a determination to understand their business and be flexible enough to come up with a tailored solution to meet their needs. This is the main challenge for the financial services community and one of the main obstacles to banks not lending more to businesses.”
© Crimson Business Ltd. 2010
